(Bloomberg) -- WiseTech Global Ltd. shares plunged in Sydney after the tech company’s board said it’s reviewing media allegations against billionaire co-founder and Chief Executive Officer Richard White of historical inappropriate behavior.
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The stock closed down 15%, the biggest decline in more than a year. The move wiped $1.4 billion off White’s wealth to $8.3 billion, according to the Bloomberg Billionaires Index. White, 70, is WiseTech’s largest shareholder and has run the company since 1994, turning it into a global supply-chain powerhouse through a series of acquisitions.
Nine Entertainment Co. publications The Australian Financial Review, The Sydney Morning Herald and The Age said Monday that White had paid millions of dollars to a former sexual partner to settle allegations made in late 2020. The newspapers said White had provided a board subcommittee with a statutory declaration denying the claims. The newspapers said they’re not suggesting the allegations are true, only that they were made.
Media stories making various claims about White’s personal relationships with women have swirled in Australia for the past three weeks, but the statement from WiseTech’s board on Monday and the market reaction raises the stakes. The company’s dominant shareholder — and the board’s governance controls — are now in the corporate spotlight for the first time.
“The board is currently reviewing the full range of matters raised in today’s media reports and is actively seeking further information and taking external advice,” WiseTech’s directors said in a statement. “It is conscious of the potential impacts on the company and will carefully evaluate all relevant factors in its assessment.”
Monday’s stock slump cut WiseTech’s market value by about A$6 billion ($4 billion) to A$35 billion. The stock has soared since its 2016 initial public offering, turning White into one of Australia’s richest people.
A spokesperson for WiseTech referred all questions to a representative for White’s lawyers, who didn’t immediately reply to an email seeking a response from White.
Only two current WiseTech directors were on the board at the time the allegations were made, and the company held a series of crisis meetings over the weekend, according to the reports.
“These allegations are a major concern for investors,” said Ed John, executive manager of stewardship at the Australian Council of Superannuation Investors, which represents some of the country’s largest pension funds. “It is critical that the board investigates these issues on behalf of all WiseTech shareholders and responds appropriately.”
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WiseTech is a key provider of the software that coordinates shipping across the world. The Australian company claims the majority of the world’s biggest global logistics providers and freight forwarders among its clients, including DHL, China’s Sinotrans, Japan’s Nippon Express and APL Logistics.
The reports on Monday also alleged that leaked communications from 2019 between WiseTech directors showed governance concerns over White’s decision to pay a former female executive A$2.7 million, double what he was earning as CEO, without disclosing this to investors.
--With assistance from Andrew Heathcote and Amy Bainbridge.
(Adds closing share move in second paragraph.)
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